Glass half full or half empty? All of it is dependent upon your perspective as India’s vehicle retailers launched gross sales figures for final month, the outlook being “cautiously optimistic”.
India bought a complete of 18.18 lakh automobiles in August 2023, in comparison with 17.70 lakh in July, and 16.74 lakh in August of final 12 months. The excellent news from the figures launched by the Federation of Car Sellers Affiliation (FADA) on Tuesday morning is that auto gross sales throughout the nation confirmed a strong 9 per cent enhance in comparison with the earlier 12 months.
The dangerous information? The state of India’s rural financial system, as evinced by particular tendencies in gross sales of many classes, together with two-wheelers and tractors.
Two-wheelers, a sign of the energy and confidence of the nation’s rural financial system confirmed that although it’s nonetheless in a subdued state, there was a gradual enchancment, signalling a nascent restoration.
“Inside the 2W section, the Indian market displayed a fancy but regular panorama,” mentioned FADA president Manish Raj Singhania. “Regardless of constructive development, shopper sentiment remained ambivalent, impacting conversion charges and intensifying competitors amongst key gamers,” he mentioned.
Nevertheless, all shouldn’t be properly in India’s hinterland, as month-on-month figures present tractor gross sales, one other indicator of rural financial system’s robustness, skilled a considerable 19 per cent contraction. Level to be famous is that this occurred in August, a month when crops and farm planning historically take centre stage.
This, when you think about stories that India is poised to expertise its weakest monsoon season in eight years might have a pivotal impression on the upcoming Navratri-Diwali purchasing interval, it’s now feared.
Sarcastically, on the similar time, stock ranges for passenger vehicles have reached an all-time excessive. Because of this vehicles being shipped by manufacturing firms to dealerships are at a report degree, signifying assured sentiments of fine gross sales in the course of the upcoming festive season. The truth is, carmakers like Maruti and Hyundai had reported all-time excessive gross sales in August, buoyed by the kickstart of the festive season with Onam in Kerala.
“Though the dealership community is buoyed by optimistic sentiment, FADA adopts a cautious stance, in view of the suboptimal rainfall which might probably have an effect on the forthcoming festive season,” in accordance with a notice by FADA.
“The outlook stays cautiously optimistic, formed by a mess of things that fluctuate throughout car segments. The onset of the festive season, starting with Onam, has uplifted market temper, improved liquidity and eased earlier bottlenecks within the provide chain throughout all classes,” it mentioned.
However it went on so as to add, “rural restoration stays tenuous, contingent on the efficiency of the ultimate part of the monsoon season. Lack of adequate rainfall might precipitate an increase in inflation, adversely affecting shopper buying energy and diminish demand. (It’s going to) not solely jeopardise the yield of the continuing kharif crops but in addition forged a shadow on the following sowing season for rabi crops. (It’s going to) be notably inopportune as they might coincide with the height of India’s festive season, historically durations of heightened shopper exercise.”
